EUR/USD rises to 1.1800 neighborhood amid renewed USD selling and trade uncertainties

The EUR/USD pair regains positive traction during the Asian session on Wednesday and jumps to the 1.1800 neighborhood in the last hour, reversing the previous day's modest losses. The intraday move up is sponsored by the emergence of fresh selling around the US Dollar (USD), which continues to be weighed down by persistent trade-related uncertainties.

Following a Supreme Court verdict against his sweeping levies, US President Donald Trump announced a new tariffs framework and signaled that his trade agenda remains firmly intact. In his State of the Union Address, Trump said that the White House pivoted to temporary global tariffs of 10% for 150 days under Section 122, and the administration is working toward 15%. This fuel worries about retaliatory measures and the economic fallout from disruptions to global supply chains, which, in turn, weighs on the USD  and provides a modest lift to the EUR/USD pair.

Meanwhile, the USD bulls seem largely unaffected by the US Federal Reserve's (Fed) hawkish tilt. Minutes from the January FOMC meeting showed that several Fed officials judged that additional easing may not be warranted until there was an indication that the progress of disinflation was back on track. Moreover, Boston Fed President Susan Collins said on Tuesday that it will be appropriate to hold in the current range for some time. Meanwhile, Richmond Fed President Thomas Barkin noted that monetary policy is well-positioned to address the risks surrounding the economic outlook.

On the other hand, the European Central Bank (ECB) President Christine Lagarde said on Monday that Eurozone inflation and the bank’s interest rate policy remain in a good place. Lagarde reiterated her long-standing guidance that no policy change is being considered, further lending support to the shared currency and the EUR/USD pair. The European Parliament decided on Monday to postpone a vote on the European Union's trade deal with the US. This might hold back traders from placing aggressive bullish bets around the EUR/USD pair and keep a lid on any further appreciating move.

Next on tap is the release of the final Eurozone consumer inflation figures. Apart from this, the final German GDP and the GfK Consumer Climate will be looked upon for a fresh impetus. Later during the North American session, traders will take cues from speeches from influential FOMC members, which might contribute to producing short-term opportunities around the EUR/USD pair. Nevertheless, the aforementioned mixed fundamental backdrop warrants some caution before placing aggressive directional bets.